Sanlam on Top of the Interest Game

1 February 2018

Two Sanlam portfolio managers brought home awards for being the top performers in their fund categories following the 22nd Raging Bull Awards ceremony held in Cape Town this week.

The prestigious Raging Bull Awards ceremony recognises the top managers in the South African unit trust industry, measured on their long-term performance. Awards for asset-specific categories of funds are based mainly on straight performance, calculated by Profile Data for the three-year period to end 2017. The winners were the Sanlam Investment Management (SIM) Enhanced Yield Fund and the Sanlam Global Property Fund.

The Sanlam Global Property Fund allows investors to participate in global property market opportunities through investment in a diversified portfolio of quality listed property securities across the globe. The Fund follows an active fundamental research driven investment approach through a combination of quantitative and qualitative insights to identify opportunities. It is managed by AllianceBernstein Investment Management.

SIM Enhanced Yield Fund a consistent winner

The SIM Enhanced Yield Fund is no stranger at the Raging Bulls Awards ceremony, demonstrating the consistency of the Fund’s performance. It was named the best SA Interest-Bearing Short-Term Fund at three of the past four years’ events! It received the honour of being first in its category for the three years to the end of 2014, 2016 and 2017 respectively.

On top of this achievement, the SIM Enhanced Yield Fund was also the top performer across all pure fixed interest unit trust categories over the past three and five years to end 2017. This means it has given the best return of all funds in the SA Interest-Bearing Money Market, Short-Term and Variable categories.

Du Plessis says the track record of the fund demonstrates its ability to outperform during increasing and decreasing interest rate cycles, as well as in favourable and unfavourable credit market environments. Its benchmark is the STeFI + 0.5%, but since its launch in May 2011 the SIM Enhanced Yield Fund has beaten the STeFI by 1.46% p.a., which is an unusually large outperformance for a fixed interest fund limited to cash, government, corporate and inflation-linked bonds.

A higher yield than money market for short-term savings

Investors who are saving for a short-term goal or who need quick access to their money, for example in the case of a ‘rainy day’ fund, are often looking for a better return than that offered by a money market fund. The SIM Enhanced Yield Fund aims to offer just that by taking advantage of a wide range of interest-bearing instruments.

Yield enhancement is pursued by using a combination of interest rate strategies and credit opportunities. Credit contributed more of outperformance on a relative basis during the last year, but the amount of value added by interest rate management and credit respectively was still relatively balanced during 2017. Over the long term the contribution of these two categories can also be expected to be relatively equal. Although it’s impossible to have perfect foresight with regards to what the future holds, Du Plessis believes that appropriate risk management and avoiding undue concentration risk is one of the most efficient ways to avoid underperformance. The fund’s highest and lowest annual returns since launch have been 9.4% and 5.6% respectively.

All SIM’s funds are driven by the house view process, and the awards reaped by the SIM Enhanced Yield Fund is testament to SIM’s superior fixed interest capabilities.

All information and opinions provided are of a general nature and are not intended to address the circumstances of any particular individual or entity. We are not acting and do not purport to act in any way as an advisor or in a fiduciary capacity. No one should act upon such information or opinion without appropriate advice after a thorough examination of a particular situation. We endeavor to provide accurate and timely information but make no representation or warranty, express or implied, with respect to the correctness, accuracy or completeness of the information or opinions. Any representation or opinion is provided for information purposes only. Unit trusts are generally medium to long-term investments. Past performance of the investment in no guarantee of future returns. Unit trusts are traded at a ruling price and can engage in borrowing and scrip lending. Sanlam Investments consists of the following authorised Financial Services Providers: Sanlam Investment Management (Pty) Ltd (“SIM”), Sanlam Multi Manager International (Pty) Ltd (“SMMI"), Satrix Managers (RF) (Pty) Ltd, Graviton Wealth Management (Pty) Ltd (“GWM”), Graviton Financial Partners (Pty) Ltd (“GFP”), Satrix Investments (Pty) Ltd, Blue Ink Investments (Pty) Ltd (“Blue Ink”), Sanlam Capital Markets (Pty) Ltd (“SCM”), Sanlam Private Wealth (Pty) Ltd (“SPW”) and Sanlam Employee Benefits (Pty) Ltd (“SEB”), a division of Sanlam Life Insurance Limited; and has the following approved Management Companies under the Collective Investment Schemes Control Act: Sanlam Collective Investments (RF) (Pty) Ltd (“SCI”) and Satrix Managers (RF) (Pty) Ltd (“Satrix”). 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Please note that past performances are not necessarily an accurate determination of future performances, and that the value of investments may go down as well as up. A schedule of fees and charges and maximum commissions is available from the Manager, Sanlam Collective Investments, and a registered and approved Manager in Collective Investment Schemes in Securities. The maximum fund charges for the SIM Enhanced Yield Fund include (including VAT): An initial advice fee of 0.34%; annual advice fee of 1.14% and annual manager fee of 0.47%. The most recent total expense ratio (TER) is 0.49%. The yield on the SIM Enhanced Yield Fund is a current yield (8.42% at 31 Dec 2017) and is calculated daily. Income funds derive their income from interest-bearing instruments, which are any assets, such as a corporate or government bond, stock or money market instrument that pays regular, periodic interest to the investor. International investments or investments in foreign securities could be accompanied by additional risks such as potential constraints on liquidity and repatriation of funds, macroeconomic risk, political risk, foreign exchange risk, tax risk, settlement risk as well as potential limitations on the availability of market information. Additional information of the proposed investment, including brochures, application forms and annual or quarterly reports, can be obtained from the Manager, free of charge. Collective investments are traded at ruling prices and can engage in borrowing and scrip lending. Collective investments are calculated on a net asset value basis, which is the total market value of all assets in the portfolio including any income accruals and less any deductible expenses such as audit fees, brokerage and service fees. Actual investment performance of the portfolio and the investor will differ depending on the initial fees applicable, the actual investment date, and the date of reinvestment of income as well as dividend withholding tax. Forward pricing is used. The Manager does not provide any guarantee either with respect to the capital or the return of a portfolio. The performance of the portfolio depends on the underlying assets and variable market factors. Performance is based on NAV to NAV calculations with income reinvestments done on the ex-div date. Lump sum investment performances are quoted. The portfolio may invest in other unit trust portfolios which levy their own fees, and may result is a higher fee structure for our portfolio. All the portfolio options presented are approved collective investment schemes in terms of Collective Investment Schemes Control Act, No 45 of 2002. International investments or investments in foreign securities could be accompanied by additional risks such as potential constraints on liquidity and repatriation of funds, macroeconomic risk, political risk, foreign exchange risk, tax risk, settlement risk as well as potential limitations on the availability of market information. The Manager has the right to close any portfolios to new investors to manage them more efficiently in accordance with their mandates. The portfolio management of all the portfolios is outsourced to financial services providers authorized in terms of the Financial Advisory and Intermediary Services Act, 2002. Standard Bank of South Africa Ltd is the appointed trustee of the Sanlam Collective Investments Scheme.

The Sanlam Global Property Fund is a sub-fund of the Sanlam Universal Funds plc, a company incorporated with limited liability as an open-ended umbrella investment company with variable capital and segregated liability between sub-funds under the laws of Ireland and authorised by the Central Bank. The Fund is managed by Sanlam Asset Management (Ireland) Limited, Beech House, Beech Hill Road, Dublin 4, Ireland, Tel + 353 1 205 3510, Fax + 353 1 205 3521 which is authorised by the Central Bank of Ireland, as a UCITS Management Company, and an Alternative Investment Fund Manager, and is licensed as a Financial Service Provider in terms of Section 8 of the South African FAIS Act of 2002. The Sanlam Universal Funds Plc full prospectus, the Fund supplement, the MDD and the KIID is available free of charge from the Manager or at www.sanlam.ie. This is neither an offer to sell, nor a solicitation to buy any securities in any fund managed by us. Any offering is made only pursuant to the relevant offering document, together with the current financial statements of the relevant fund, and the relevant subscription/application forms, all of which must be read in their entirety together with the Sanlam Universal Funds plc prospectus, the Fund supplement the MDD and the KIID. No offer to purchase securities will be made or accepted prior to receipt by the offeree of these documents, and the completion of all appropriate documentation. A schedule of fees and charges and maximum commissions is available on request from the Manager. This is a Section 65 approved fund under the Collective Investment Schemes Control Act 45, 2002 (CISCA). Sanlam Collective Investments (RF) (Pty) Ltd is the South African Representative Office for this fund. The information to follow does not constitute financial advice as contemplated in terms of the South African Financial Advisory and Intermediary Services Act. Use or rely on this information at your own risk. Independent professional financial advice should always be sought before making an investment decision, not all investments are suitable for all investors. Collective Investment Schemes (CIS) are generally medium to long term investments. The value of participatory interests may go down as well as up and past performance is not necessarily a guide to the future performance. Changes in exchange rates may have an adverse effect on the value, price or income of the product. Collective investments are traded at ruling prices and can engage in borrowing and scrip lending. Collective investments are calculated on a net asset value basis, which is the total market value of all assets in the portfolio including any income accruals and less any deductible expenses such as audit fees, brokerage and service fees. Actual investment performance of the portfolio and the investor will differ based on the initial fees applicable, the actual investment date, the date of reinvestment of income as well as dividend withholding tax. Forward pricing is used. The Manager does not provide any guarantee either with respect to the capital or the return of a portfolio. The performance of the portfolio depends on the underlying assets and variable market factors. Trail commission and incentives may be paid and are for the account of the Manager. The Manager has the right to close any Portfolios to new investors to manage them more efficiently in accordance with their mandates. Performance figures for periods longer than 12 months are annualized. The maximum fund charges for the Sanlam Global Property Fund include: annual investment management charge of 1.30%. The Effective Annual Cost is 1.30%. The fund’s highest and lowest annual returns since launch have been 0.55% and 14.86% respectively.